Rift in Canada’s Solar Industry as Tariffs Imposed on Chinese Solar Panels

Soalr Field Construction

By Arman Kazemi

March 19, 2015

Low-cost Chinese solar equipment has allowed Canadian installation firms to offer economical services and help stimulate the Canadian solar market. But a new ruling by the Canada Border Services Agency imposes duties of up to 286 per cent on Chinese-sourced solar panels, with potential impacts across the solar industry.

Earlier this month, the CBSA issued a preliminary finding that cheaper solar modules manufactured in China – which benefit from Chinese government subsidies – were being dumped on the Canadian market and driving up costs for domestic manufacturers.

Canadian panel manufacturers, on the other hand, benefit from no such subsidies and have to grapple with already thin profit margins in what they claim is an imbalanced market, according to a report in the Globe and Mail.

The CBSA’s ruling comes as a result of a joint complaint put forward by four Ontario manufacturers last December. Eclipsall Energy Corp., Heliene Inc., Silfab Ontario Inc. and Solgate Inc. initiated the federal review after suggesting that cheap Chinese imports create an unfair climate of competition and have forced domestic producers to choose between cutting costs or closing down operations altogether.

Yet opponents of the ruling claim that with the new tariffs, Canadian installers will no longer be able to install and maintain solar PV at prices that would attract customers away from incumbent utilities, depressing the domestic market for solar, costing thousands of installation jobs and ultimately barring the path toward the wider adoption of renewable energy in Canada.

“The tariffs are the biggest step backwards Canada has made in the past 10 years towards replacing fossil fuels with renewables,” Dave Egles, president of solar installer HES Home Energy Solutions Inc. in Victoria, B.C. told the Globe and Mail.

A final decision on any enduring tariffs, however, has to await a detailed report by the Canadian International Trade Tribunal. Although the final decision is at least four months away, this latest ruling imposes a provisional levy of 286 per cent on all but nine Chinese PV exporters. The latter are subject to a specific duty of between 9 to 202 per cent.

At a time when the domestic industry is working to prove the effectiveness – both economic and environmental – of solar photovoltaics, this ruling could prove divisive for the Canadian solar industry, making it harder to rally government support which the sector needs to compete with incumbent utilities.

“We were just sort of on that border where the economics worked,” David Kelly, CEO of Alberta’s Skyfire Energy Inc., a solar installer, told the Calgary Herald. “With this change, it’s thrown that all out the window.”